How SEC's Proposed Rule Changes Could Affect Investors

Motley Fool Money

The Motley Fool

Business, Investing

4.4 • 3K Ratings

🗓️ 9 June 2022

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

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Summary

SEC chairman Gary Gensler outlined rule changes to require trading firms to directly compete to execute trades from individual investors (0:25) Andy Cross discusses:
- Why payment-for-order-flow (PFOF) is going to be a big topic this summer
- Potential threats to Robinhood's business model
- Five Below's recent (and uncharacteristic) struggles
- Takeaways from Spotify's investor day event, including a push into audiobooks

(15:45) Deidre Woollard continues her conversation with Jason Hall about homebuilders, including key metrics to watch and a few stock ideas.

Stocks discussed: HOOD, FIVE, DLTR, DG, WMT, SPOT, AMZN, AAPL, MTH, LGIH, NVR

Host: Chris Hill
Guests: Andy Cross, Deidre Woollard, Jason Hall
Producer: Ricky Mulvey
Engineer: Rick Engdahl

Transcript

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0:00.0	Spodify is going after part of Amazon's business and the SEC is going after a certain type
0:10.3	of stock trading.
0:11.8	Motley Fool Money starts now.
0:17.6	I'm Chris Hill and I'm joined today by the Chief Investment Officer, Andy Cross.
0:21.4	Thanks for being here.
0:22.4	Yeah, of course, Chris.
0:23.4	Thanks for having me.
0:25.5	We got some companies to get to, but we got to start with the SEC, which is a place
0:29.4	where we rarely start on this show.
0:32.1	But on Wednesday, Gary Gantzler, the chairman of the SEC, proposed rule changes that could
0:38.8	affect individual investors like you and me and the dozens of listeners.
0:43.4	The plan would require trading firms to directly compete to execute trades from individual
0:49.4	investors in an effort to increase competition.
0:53.0	And this is all about an issue that we've heard about and talked about from time to time
0:57.6	over the past couple of years.
0:58.9	Payment for order flow.
1:00.7	This is where brokers like Robin Hood and E-Trade and others are paid by wholesale market
1:06.9	makers for orders.
1:09.2	Gantzler sort of put this out there and it really starts this process that if I had the
1:14.2	timing right, Andy, this is going to go through the summer.
1:17.3	Eventually, official rule changes are going to be proposed.
1:20.7	Will be available for public comment for institutions and individuals to weigh in on.
	...

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